The e-Commerce market of the United States

Branches of e-commerce

E-commerce is the act of buying and selling through electronic platforms (Teo et al.2007). There exist three branches of electronic commerce; one well known and used is online shopping, also referred to as business to consumer (b2c). The channel allows consumers to order various products and pay via the internet. The other category is business to business (b2b) where companies consisting of manufacturers, wholesalers, retailers use the platform to exchange products as well as services. The last category of e-commerce is a consumer to consumer (C2C) who transacts amongst themselves, for example, in the case of eBay. The e-Commerce market of the United States has been evolving over the past years. Also, the United States is considered a hotspot for growth-minded international sellers.
Besides, it’s a global leader in both exports and imports of cross-border e-commerce (Teo et al.2007). Thus, there is a considerable purchasing power and advanced technologies on online shopping. The projection of the retail sales is projected to escalate in the coming years from a current 505 billion US dollars to over 735 billion US dollars in 2023. Amazon is the most used e-retail platform in the United States (Teo et al.2007). In 2018, the company generated over 235 billion US dollars through retail e-commerce sales in the United States. There is high consumer satisfaction within the United States online retail. However, online sales only represent a small fraction of all retail sales in the United States. A growing trend within the e-commerce market in the United States has facilitated the use of mobile shopping amongst people of all age groups.

The increase in the number of buyers

The increase in the number of mobile buyers has impacted mobile commerce revenue. The mobile retail revenue in the United States is expected to increase from 156 billion US dollars to 420 billion US dollars in 2021 (Teo et al.2007). High consumption rates take place during the seasons. Thus, business-minded individuals should consider days such as Black Friday, Cyber Monday, and holiday period where they will make more sales compared to other times. Consequently, Understanding the different cultures also helps sellers to diversify their business on online platforms. The leading products among online users in the United States for both male and female include clothes, shoes, beauty, and personal care products (Teo et al.2007). The United States provides a market that has a well-developed market logistic, which makes delivery much easier, promoting convenience for online shoppers. However, there exist cross-border shipping challenges that need articulation such as insecurities like the recent violent escalation along the Mexico and Texas routes. The other problem comes from the economic recession in the United States leading to job loses, regulations by the government, which poses a restriction on the sale of some products online such as alcohol, food, and medicine (Teao et al.2007).
Porters’ five forces
The Ecommerce industry has grown at an impressive rate in the last few years. The reasons attributed to this growth include economic activities as well as technology development across the world. The two elements have a significant influence on e-ret ail industry (Karagiannopoulos et al.2005). The growth is expected to remain the highest in the United States in the near future. Some of the big players in the United States e-retail industry include Ali-Baba, Amazon, E-bay, and Flipkart. Apart from these players, Wal-Mart and Costco have made an entry into e-retail. The following porters five forces impact the e-commerce industry.
 Bargaining power of suppliers- in this industry, the bargaining power of suppliers is low to moderate. The aspect is due to the fact that most rules get set by the brand and the supplier has to follow such regulations. Most of the e-commerce brands become extra careful regarding their supplier relationships and set code of conduct related to quality, labor, wages as well as sustainability (Karangiannopoulos et al.2005). The limitation the suppliers have is that they get bond by the rules that the brand has set, giving ecommerce brands and upper hand and reducing the bargaining power of the suppliers.
 Bargaining power of the buyers-the bargaining power of the buyer is relatively high in the ecommerce industry, due to the fact that the rules get set by the brand and the supplier has to abide by the same. Also, customers have become adequately informed in this era and easily access information. Technology, large investments, as well as customer service have increased the buyers bargaining power. For the industry to moderate such power, they have to work on brand image, product and service quality, and price (Karagiannopoulos et al.2005).
 Threats of substitute product-there are two threats in terms of substitute for the Ecommerce brands. One of the threats is the competing e-retail business and the second is the physical retailers (Karagiannopoulos et al.2005). Brands compete amongst each other through low prices, better quality product and overall customer experience. For the customer, there is no switching cost, thus, they can easily shift from e-commerce to physical retail.
 Threats of new entrants the threat of new entrants is low to moderate in the e-commerce industry. The factor is due to the need for a large investment in technology, human resource, and marketing (Kar0agiannopoulos et al.2005). The barriers to entry are moderately high, as one can enter with enough capita. However, the challenge comes from building a brands’ image and trust with the customers. Hence, the overall threat for new customers becomes moderate.
 Rivalry in the industry-the level of rivalry in this industry is high due to the increase in the number of players (Karagiannopoulos et al.2005). The number of local and global brands has increased leading to high competition.
The drivers of change in the industry and their impact
There are trends and events that are the driving force of ecommerce. One of such forces is third-party logistics. Logistics plays a crucial role in the creation of visibility in the e-commerce supply chain and determines the overall satisfaction of the customers, efficiency and service delivery. Unfortunately, the logistics process is tedious and complex. Also, it calls for high expertise and networking of several small systems (Donici et al.2012). The trends have facilitated the growth of supply chain within the industry. Third-party logistics is now emerging as a key driver in e-commerce in the country. Most online retailers find it financially in order to look for a logistics component of the supply chain given its challenges and capital demand. The 3PL service providers help retailers to efficiently deliver to their customers. Also, there exist companies with shipment tools to cater for the e-commerce industry (Domici et al.2012). They offer storage maintenance, storage, and delivery, relieving the e-retailers the extra cost of maintaining warehouses and means of transport. The risk of damage while goods are in transit is significantly reduced (Donici et al.2012). Secondly, the explosion in mobile internet penetration. The use of the latest mobile technology is playing a major role in the growth of e-commerce. The need to ease the act of shopping led to the rise in mobile shopping. Mobile internet penetration together with extra income is driving people to online shopping mobile (Domici et al.2012). Consequently, an increased range of payment for underbanked shoppers has driven e-commerce. Unlike in the first world countries, many people in the second and third world countries are underbanked. Thus, large online platforms such as PayPal and Payoneer have expanded across the world facilitating online transactions. Political willingness and promotion of online trade has also contributed to this growth. The lowering of customs, clearance procedure and other lengthy procedures has increased delivery time in many emerging markets (Domici et al.2012). Technology has also enhanced accessibility. Growing of big data has also promoted e-commerce due to the fact that they analyze customer needs and deliver according to the customers’ expectations. Online retailers personalize each offer they make and ensure that the client feels valued. In return, this has led to immense sales volumes (Domici et al.2012).
Key success factors for competitive success
One of the key factors for competitive success is regulation of product pricing. It’s natural for customers to make price comparison on brands. Thus, it becomes necessary for an entrepreneur to know how much the competitors charge for their goods. Various pricing strategies can be employed for the purpose of attractiveness and earning. For instance, the keystone pricing, which translates to the doubling of the wholesale price but one should counter check not to price an item high or too low (Teo et al.2007). Maintaining high quality products is also essential. For a long time, people believed products on e-commerce were of inferior quality as compared to those on physical stores. E-retailers ought to ensure they secure products from well-known and trusted retailers. The improvement of store accessibility is also significant as it helps business accessibility for all types of customers (Teo et al.2007). A wonderful first impression is imperative as it gets more customers in an individual’s store. Securing shipment is also crucial. The main challenge for both the customers and entrepreneurs in e-commerce is the issue of security. The potential of information compromise is a risk all parties should put into consideration and safeguard to avoid insecurity incidences. The entrepreneur ought to make use of SSL to secure their customers online. SSL makes sure data is encrypted so there is less of a chance for compromise.
Industry attractiveness and prospect for long-term profitability
The continued growth and long term profitability of this sector will depend on trust, accountability, security enhancement, perceived quality, government role, as well as accessibility (Teo et al.2007). The industry will diversify in the coming years and shall dominate many countries across the world. New technology is expected to also change how most delivery is done and this will expand on e-commerce further. The aspect will allow retailers to tap into new markets where the use of smartphones is new, which shall drastically increase sales for e-retailers. Also, competition is expected to increase as more retailers will want to enter the industry with the hope of attracting more customers for their products and services.

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